Long-Term Borrowing

Executive Summary on Borrowing 

Twice a year, following the Annual General Meeting in the spring and the Semi-Annual Meeting in the fall, the MFA will fund client loan requests which have undergone all appropriate approval processes. Deadlines for regional districts to submit Security Issuing bylaws to the Ministry of Housing and Municipal Affairs for a Certificate of Approval are typically six weeks before these meetings. 

Please be advised that the MFA has implemented a brief application required to complete a long-term borrowing request.  Once we have entered a draft loan into our system, the CFO of each borrower will be notified that they need to complete an application in the client portal.  The information collected will enhance transparency and help facilitate MFA investors’ bond-level evaluation of Environmental, Social and Governance (ESG) factors. 

Once long-term borrowing requests are approved, clients can generally expect funding between April and June for the Spring Issue or between September and December for the Fall Issue. The exact timing of funding will vary as we monitor the capital markets and manage refinancing requirements. Please see our Short-Term Borrowing page if you require funds between long-term issues. 

Long-term loan proceeds equal 99% of the gross request, and the MFA withholds 1% as security against loan default.  The 1% is held in trust by the MFA in its Debt Reserve Fund (DRF) and will be refunded, with interest, at loan expiry. 

New issues are often (but not always) funded by issuing a 10-year bond, locking in a fixed interest rate for ten years. As clients may borrow for up to thirty years, loans longer than ten years are typically refinanced every five years, following the initial ten years. 

Please note that while new issues are generally for a 10-year term, the MFA will evaluate how best to finance each Issue based on market conditions, the requests received, and with our overall portfolio in mind, as we consider future refinancing risk. 

Interest payments are required semi-annually and begin six months after proceeds are received. The MFA passes these payments on to the bondholders. Interest costs are based on the original amount borrowed throughout the loan's life. 

Principal repayments occur annually, beginning one year after funds are received. The MFA deposits principal payments in a sinking fund where they earn interest until it is time to repay the bondholders.  

The earnings the MFA anticipates it will realize on principal repayments are called the actuarial.  An actuarial adjustment is associated with each principal payment (beginning in year two), which is a non-cash reduction of your loan balance based on expected sinking fund earnings. 

The outstanding obligation to the MFA is the gross loan request, less the sum of the accumulated principal payments and the actuarial adjustments to date, or in other words, the reducing balance on the amortization schedule as of the most current date.  

Surplus Payments: 

If the MFA earns more than the estimated actuarial, the borrower will be paid any excess shortly after paying the loan in full. 

For details of specific Issues, please see your Loan Rates and Dates report in the Client Portal, and to estimate borrowing costs for new loans, please visit the Long Term Debt Amortization Schedules. 

Early Loan Repayments: 

For information on Early Repayment of Long-term Loans, please visit this page.

Fall 2025 Issue:

 To be included in the Fall 2025 issue the following deadlines are applicable:

  • Regional Districts – August 8, 2025: Applications for a Certificate of Approval on a Security Issuing bylaw due to Ministry.
  • Regional Hospital Districts – August 8, 2025: Certified Capital Borrowing bylaws, RHD Liability Certificates and Requests for Long Term Financing due to MFA.
  • Refer to the Fall 2025 Long-term Borrowing Opportunity memo for full details.

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